Santos has entered into the front-end engineering and design phase for the proposed Bayu/Undan carbon capture and storage project offshore Timor-Leste.

The Bayu/Undan CCS project could potentially permanently store up to 10 million tonnes of carbon dioxide per annum, the Australian operator said.

The idea is for carbon dioxide to be reinjected into the Bayu-Undan reservoir once the field has been permanently shut down.

The FEED work will include engineering and design for additional CO2 processing capacity at the Darwin liquefied natural gas plant and repurposing of the Bayu-Undan offshore facilities for carbon sequestration operations.

Santos is working closely with the Timor-Leste authorities towards the necessary agreements and regulatory framework required for the Bayu-Undan CCS project.

The project also needs agreements between the governments of Timor-Leste and Australia, and some Australian regulatory arrangements.

The final investment decision on Bayu-Undan CCS is targeted for 2023.

Potential feedstock sources include the Santos-operated Barossa project, and other undeveloped discoveries in the Timor Sea.

Santos chief executive Kevin Gallagher said taking FEED builds on the growing momentum for the regional carbon reduction project.

“Located in Timor-Leste with potential CO2 sources from Australian gas projects and other industries in the Northern Territory, Bayu-Undan CCS could be the start of a valuable new carbon services industry for Timor-Leste.

“It would create new jobs and a new revenue stream for the nation once gas production from Bayu-Undan ceases,” Gallagher said.

‘Growing momentum’: Santos chief executive Kevin Gallagher Photo: ANDREW BEVERIDGE/APPEA

“Entry into the FEED phase has strong support from our five joint-venture partners headquartered in Japan, Korea and Italy. And last month, a meeting of the Timor-Leste and Australian prime ministers included a commitment by Australia to establish an LNG Partnership Fund to deepen links between Australia and Timor-Leste in gas development and trade, including in the use of carbon capture and storage.

“With about 80% of the world’s energy still coming from hydrocarbons, including natural gas, and new supply investment still required to meet the world’s ongoing demand for these products, it is essential that we decarbonise their production.

“CCS offers a large-scale, low-cost and permanent way to progressively make these fuels cleaner. CCS will also enable new clean-fuels industries such as hydrogen which will dramatically reduce not only Scope 1 and 2 emissions, but Scope 3 emissions as well,” Gallagher said.

Santos has a 43.4% operated interest in the Bayu-Undan and Darwin LNG projects. Its partners are SK E&S holding 25%, Inpex with 11.4%, Eni on 11%, Jera holding 6.1% and Tokyo Gas with 3.1%.

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